Tax deferred investing is nice, but if your time horizon is only 10 years (actually probably a decade or two longer than that because you won't draw down all investments on day one of retirement), the benefits of sheltering some investments from yearly taxes on capital gains and dividends might not be quite as important as just picking "better" and perhaps more tax efficient investments (proven, lower portfolio investment strategy where individual investments don't turnover rapidly so capital gains distributions end up being long-term in nature and taxed at lower rate). But you also have to be careful about swinging for fences with investment that is very volatile because if it unexpectedly (temporarily) plunges right when you need to sell that investment, you are forced to lock in a loss. Which is typically why strategic asset allocation starts to include more bonds and cash as you approach retirement, and perhaps steer more towards blue chips, or growth and income, or dividend paying type investments, rather than wild speculative small cap which could make you rich or put you in poor house. Absolute return isn't as great, but wild swings up and down in price are dampened, and hopefully some investments zig when others zag, so total portfolio value doesn't fluctuate wildly up and down and you are forced to sell during unexpected downdraft.
I believe there are calculators where you can get a better idea of how much ball park wise you need to have in investments to retire as comfortably as you want, and then can adjust your "risk" up
at least to level required to achieve that goal.
Capital gains and tax rates for most are 15%, not ordinary income rates, and mutual funds only pay out some capital gains and dividends each year.
Harsh answer for some is 1) save more, and 2) work longer (don't have to dip into nest egg so quickly and hopefully can continue to contribute to investments).
You should also google for deferring taking social security (e. g.
http://online.wsj.com/article/SB10001424127887324715704578482982090853070.html) i think you can get a bit more if you put off taking distributions for a while.
As you approach retirement, volatility of portfolio becomes important, because sudden, prolonged and sustained downdraft, could force you to sell low because you need those funds to live on. Bonds probably aren't going to do well in rising interest rate environment, but something like quality intermediate term bond fund (Vanguard Index Total Bond Market) is supposed to zig when stock market zags (normally), dampening overall fluctuations in portfolio value, even though stocks >> bonds > cash historically.
Something like quality dividend
growth mutual fund (e. g. VDIGX) is something to research instead of reaching wildly for "safe" yield in defensives that are getting smashed in stock market right now.
http://www.nytimes.com/2011/01/22/y...-plans/22money.html?_r=2&src=me&ref=homepage&
http://bucks.blogs.nytimes.com/2012/09/12/suggested-retirement-savings-goals-by-age/
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